Part of the reason electric vehicles (EVs) have grown to be so popular in the U.S. is tax incentives. In the third quarter, EV sales topped 313,000, growing nearly 50% year over year. A big reason for that was the generous $7,500 tax credit created by the Inflation Reduction Act.

This credit has a few stipulations, and the fine print will bite Tesla (NASDAQ: TSLA), along with a few other EV makers in 2024.

The tax credit is centered around where the battery minerals and components are sourced from. Because the U.S. government wants to source these vital components for EVs domestically or from a free-trade agreement partner, Tesla and its peers must strategically plan their supply chain.

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Source Fool.com